Case Study – VAT Recovery Methodology for a Partially Exempt Business

Background

Our client was a partially exempt business. They initially approached Customs Connect as they had concerns that the partial exemption recovery method was no longer suitable or effective.

Our Solution

We worked with the client’s divisional heads to understand the product and service offerings of the business and how the financial and VAT reporting operated. Based upon a sample period, we then developed several different methodologies for VAT recovery.

It became clear that whilst a number of the more complex methods produced the best VAT recovery position, this had to be weighed up against the time it would take to perform the calculations. We presented the findings and worked with the client’s finance team to establish which method had the optimum balance of VAT recovery rate versus the resources required to deliver these savings.

Once a methodology was agreed upon, we worked on their behalf to present our approach to Customs Authorities, responding to their enquiries and negotiating amendments before obtaining their sign-off.

Results

Our client now has a more effective and efficient VAT partial exemption recovery method that increased the VAT recovery by approx. €225k per annum.

By working in partnership with the client, we developed a good practical and commercial solution that generated additional absolute savings.

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